In Response To Growing Protests, EU Pulls Corporate Sovereignty Chapter From TAFTA/TTIP To Allow For Public Consultation

from the more-of-this,-please dept

Here on Techdirt, we've been writing about the dangers of corporate sovereignty for a while. In recent months, more and more people and organizations have pointed out that the plan to include an investor-state dispute settlement (ISDS) in the TAFTA/TTIP agreement currently being negotiated is fraught with dangers -- and also completely unnecessary given the fair and efficient legal systems that exist on both sides of the Atlantic. It seems that this chorus of disapproval has finally been noticed, in Brussels at least:

EU Trade Commissioner Karel De Gucht today announced his decision to consult the public on the investment provisions of a future EU-US trade deal, known as the Transatlantic Trade and Investment Partnership (TTIP). The decision follows unprecedented public interest in the talks. It also reflects the Commissioner's determination to secure the right balance between protecting European investment interests and upholding governments' right to regulate in the public interest. In early March, he will publish a proposed EU text for the investment part of the talks which will include sections on investment protection and on investor-to-state dispute settlement, or ISDS. This draft text will be accompanied by clear explanations for the non-expert. People across the EU will then have three months to comment.

That's a hugely significant admission that the European Commission's attempt simply to push ISDS through without explanation or consultation was a major tactical error. By failing to address the manifest problems with investor-state disputes, the European Commission allowed the overall sentiment towards TAFTA/TTIP to become increasingly negative. Clearly, what De Gucht hopes to achieve with this three-month pause is to convince people that ISDS is not a threat to national sovereignty, and thus to salvage the agreement as a whole.

Still, De Gucht's move to open up at least this area of TAFTA/TTIP for public discussion is to be welcomed, even if it was made rather unwillingly. Now that the European Commission has finally admitted that it is indeed possible to release its negotiating text in order to allow a public debate, we must have similar transparency for the rest of the agreement.

I'll believe that when they actually consult the public. The EU Commission (not the EU Parliament) is the most egregious example of corruption-laundering in Europe, with non-publically-elected positions being the norm, rather than the exception.

it still doesn't mean that any notice will be taken of what the public wants or is best for it, being the biggest stake holder in this and every other 'agreement'. the USTR has tried pulling that trick, when in actual fact they are doing the absolute opposite! on top of which, the EU and the people wont have forgotten what an arse hole de Gucht is. he was the driving force behind ACTA, he has already been involved in 'talks' in Hollywood (i haven't read where he has been involved in talks with anyone from any of the public body groups or representatives) which must be seen as making him, yet again, completely bias in favor of copyright and anti file-sharing, just as before. he would have been better off backing completely away from any of this shit, before he gets politically ripped up for arse paper again! and that goes for anyone that backs him. the EU people rose in force against ACTA and they will hopefully do so again against this crock of crap!!

If DeGucht is involved there is cause for concerns whatever he says. That man is as slimy as they come as he showed with the ACTA kerfuffle.That they're holding off and waiting for input from the public is a nice soundbyte, but just seeing his name on it arouses all sorts of suspicions.

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None of them are publically elected to the specific position so it is more than a norm.

The commissioners have an incredible discretionary power in the legislative process since they have a veto on every legislation proposed. Corruption laundering is probably the wrong term here since the commissioners are pretty decently surveilled. It is more of a problem that the commission as an entity is expected to be national politically neutral. How can governments justify selecting politicians then and how can the specific posts be undetermined before the people are chosen?!? No, the commission lacks better job descriptions, less personal power and a better election procedure.

So - if a corporation is considered a sovereign entity, how long until said corporation decides it needs its own military force?

Oh wait a sec - it has already happened.Or not. Did Monsanto buy Academi or not?

Does a corporation have to declare war, or can they just covertly overthrow governments as they please? Not buying our GMO huh ... well we'll just see about that.Que Team America swooping in to right all evil, err I mean make them buys our stuff.

I've seen these public consultations before and they tend to try to guide the people towards their way of thinking. I expect the same kind of mealy-mouthed misleading crap this time around. Make use of the comments section, people!

Meanwhile, let's be keeping the pressure on our MEPs to get the full text out and warn them there will be another ACTA-style whitewash when it comes up for the vote if they don't.

Who knows, if we can get the changes in that protect the public interest and strip out corporate sovereignty and IP maximalism, we might even end up with an agreement we're happy with, that actually benefits both sides.

I'm not opposed to trade agreements as such, just the one-sided ones that seem to be floating around at the moment. Let the people have their say - for the whole thing.

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"Corporate Sovereignty" my posterior. Whether one likes them or not, the motivation underlying such provisions from the perspective of investors (and investors include far more than just corporations, as the foregoing term would have one believe) is that they attempt to place a speed bump on the road to make it more difficult for a government to breach an agreement and then attempt to hide behind sovereign immunity to avoid the consequences of its breach. As a sovereign, countries can simply opt out of a lawsuit, as is done countless times here in the US at both the state and federal level. In many instances this leaves an individual (person, company, etc.) with zero recourse to judicial systems by which disputes are resolved. What good is it to have a legal right when the forum for vindicating that right tells you "Too bad. You are out of luck because Government X has decided to ignore your matter...leaving you SOL and without any remedy whatsoever."

In the context of international trade, private investors engage in country-specific investments with the general expectation that the country will not try to change the rules of the game on the investment is firmly ensconced within the country. "Yeah, we know we said that to entice your investment, but with your money in hand we have decided to change the deal and keep your money. Heck, we might even take over what you have constructed that was the subject of your investment. Look on the bright side. We will send you packing back to your country and give you first class tickets for your return trip."

Now, obviously some of the above is an exaggerated for effect, but it does in my view place the issue in a more accurate light that all these anti-ISDS groups talk about.

As with any system for resolving disputes (mediation, arbitration, courts of law) there are always pluses and minuses. None of them are perfect and each can render a decision that operates as a manifest injustice. Nonetheless, they seem to be the best we have, and extra-judicial systems to have at least the benefit of arriving at decisions before the wheels of the judicial system have even begun to turn, which is an extremely important consideration in investment disputes.

I do not ignore the fact that the boundaries of any system can attempt to be expanded by novel theories, but simply because this is possible is not in my view a good reason to rail against these alternate dispute resolution approaches because they do have substantial upsides.

BTW, there is nothing to prevent a country that loses in such an extra-judicial venue from simply ignoring a decision. The consequence, however, is the possibility, not certainty, of trade sanctions and perhaps even a downgrade of such a country's international reputation for integrity. Of course, since few countries enjoy such a reputation, it hardly seems like a major "black eye" within the community of nations.

Importantly, I am not in the least involved with either these alternate dispute resolution mechanisms, so trying to identify me as a "conflict of interest shill" would be totally of the mark. I am merely trying to point out that such the articles on this site decrying such mechanisms are passing along only a part of the story, and do so with ulterior motives in mind that represent a return to the status quo where sovereign immunity once more represents an impenetrable wall that may be used to deny private parties any remedy for blatant breaches by a country.

At least it's a step in the right direction. Now we'll see if the negotiators actually listen to the public's concerns, or completely ignores them and passes this economic abomination against their will, anyway.

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Your comment, as per your usual screeds, is so full of wrong that it's somewhat incredible.

"Corporate Sovereignty" my posterior. Whether one likes them or not, the motivation underlying such provisions from the perspective of investors (and investors include far more than just corporations, as the foregoing term would have one believe) is that they attempt to place a speed bump on the road to make it more difficult for a government to breach an agreement and then attempt to hide behind sovereign immunity to avoid the consequences of its breach.

Bullshit. First off, we're talking about the EU and the US here. How frequently are those countries breaching investor agreements? There are plenty of "speed bumps" already in place to block such breaches: such as the fact that investors would move their money elsewhere. Transatlatnic investment is already the largest bilateral trade in the world. There is no indication that there's some crazy risk of France running off with American investors' money.

There are already plenty of consequences of a breach in such situations: nobody would trust them again.

As a sovereign, countries can simply opt out of a lawsuit, as is done countless times here in the US at both the state and federal level. In many instances this leaves an individual (person, company, etc.) with zero recourse to judicial systems by which disputes are resolved. What good is it to have a legal right when the forum for vindicating that right tells you "Too bad. You are out of luck because Government X has decided to ignore your matter...leaving you SOL and without any remedy whatsoever."

Again, this is wrong. There are alternate dispute mechanisms in place, such as when *the country* goes to the WTO to dispute such a breach. This happens all the time, and allows things to be handled at the country level, rather than giving corporations alternate sovereignty above and beyond local laws.

In the context of international trade, private investors engage in country-specific investments with the general expectation that the country will not try to change the rules of the game on the investment is firmly ensconced within the country.

Again, you make it sound like these sort of breaches happen all the time between modern western democracies.

Your points MIGHT make sense if we were talking about a trade agreement with a banana republic (though, even then, the response is just to never invest again there), but when we're talking about two parts of the world that already trade freely? You're just spouting crazy ignorance.

As with any system for resolving disputes (mediation, arbitration, courts of law) there are always pluses and minuses. None of them are perfect and each can render a decision that operates as a manifest injustice. Nonetheless, they seem to be the best we have, and extra-judicial systems to have at least the benefit of arriving at decisions before the wheels of the judicial system have even begun to turn, which is an extremely important consideration in investment disputes.

You mean like when Eli Lilly sues Canada for "lost profits" because Canadian patent law finds their application unpatentable? That's not an investor dispute, that's a company seeking to object to Canada's patent system.

BTW, there is nothing to prevent a country that loses in such an extra-judicial venue from simply ignoring a decision. The consequence, however, is the possibility, not certainty, of trade sanctions and perhaps even a downgrade of such a country's international reputation for integrity. Of course, since few countries enjoy such a reputation, it hardly seems like a major "black eye" within the community of nations.

Except, even without ISDS, if a country breached an investor agreement they can and do face trade sanctions and a downgrade in international reputation. You don't need ISDS for that.

I don't understand why you come here, always pretending to be smarter than everyone, and then spout such ignorance.

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So, you would approve of America upholding these rulings, am I correct?

Because America is leading the way of the corporations that are levying these Investor-State Dispute mechanisms against other sovereign nations, aiming for multi-billion-dollar settlements against countries like the Republic fo South Africa and even Canada. But when the US doesn't hold to its own free-trade agreements (see also: Antigua), they have no recourse.

This is the main issue I have with these resolution mecahnisms; that corporations are being held to be higher in the law than the public. Which is impressive, for imaginary faceless people.

I am all for corporate sovereignty, after all if a US company can use it to sue a south american country to avoid paying fines levied on them for environmental pollution caused by drilling for oil and gas, then BP can use this to sue the US government to get its money back for the fines levied against it due to the Gulf Oil spill caused by shoddy American craftsmanship, and shoddy operations by an American subcontractor.

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I've seen these public consultations before and they tend to try to guide the people towards their way of thinking.

I'm sure that the corporations who will benefit from this the most will be pressuring their employees to comment in the company's favor also. It will be flowery rhetoric that basically boils down to: "This is a good thing for the company, therefore it's also good for your continued gainful employment with us...". I've experienced this type of pressure when I worked for an energy company going through the deregulation years.

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This article begins with links to prior criticisms of these types of provisions, and then notes that apparently such criticisms have struck a responsive chord with respect to a specific agreement.

My comment was to these types of agreements in general, that there are pros and cons, and that almost invariably anything presented here fixates on the cons with virtually nary a mention of pros. If your goal is to indoctrinate, then perhaps what is presented here on a consistent basis fits the bill. I happen to believe, however, that mentioning both sides of an issue enables people to form their own opinions. My comment does not promote one over the other, but merely points out that there are perfectly valid reasons for provisions such as these. I did not endorse them, but only noted they are not irrational and without merit.

The reasons private parties may find alternate dispute resolution systems beneficial is that the longstanding judicial principle of sovereign immunity can slam the door shut on a private party receiving a remedy for a legal right it holds. Frankly, I believe there is much to commend approaches that mitigate the possibility of governments to try and retreat behind such immunity.

Try negotiating complex business transactions with governments all over the world, both developed and underdeveloped nations, and perhaps you may gain some modicum of appreciation for why private parties may find such provisions an important consideration.

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Instead of coming on techdirt to focus on what you believe are the negative aspects of the blog with your comments why don't you focus more on the positive aspects. The blog is informing us about important issues and the fact that corporations have way too much leeway in legislation making and the laws are entirely one sided in their favor.

You are free to present your argument of both sides of the issue here. You are free to start your own blog and do the same. But when no one visits your blog because you can't present us with anything useful don't come crying to others to tell them how to run their blogs and expect to be taken seriously.

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that almost invariably anything presented here fixates on the cons with virtually nary a mention of pros.

With many things, particularly many things discussed here, the cons are so huge that there is no number of pros that come close to balancing them out. Corporate Sovereignty is one of those things. NSA spying is another, etc. The pros are indeed mentioned here, but typically there's little more to say about them because they're insignificant compared to the downside.

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My comment was to these types of agreements in general, that there are pros and cons, and that almost invariably anything presented here fixates on the cons with virtually nary a mention of pros.

Oh bullshit. I will note that I've seen you on other sites, those of copyright and patent maximalists, where you universally cheer them on, with nary a complaint that they fail to present "the pros and cons" of their arguments.

My comment does not promote one over the other, but merely points out that there are perfectly valid reasons for provisions such as these. I did not endorse them, but only noted they are not irrational and without merit.

Oh bullshit. You ALWAYS pull that wounded innocent line. You clearly are supportive of this, just as you're supportive of IP maximalism and the surveillance state. It's only when we call you on your bullshit that you suddenly pretend you were "merely adding information" or whatever crap line you come up with.

Try negotiating complex business transactions with governments all over the world, both developed and underdeveloped nations, and perhaps you may gain some modicum of appreciation for why private parties may find such provisions an important consideration.

And, of course, you always conclude with some pedantic bullshit line like the above, implying that only you, the wise master, could possibly understand these issues.

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Facebook, Volokh Conspiracy (now hosted by Washington Post, thus more readily available to others outside the sphere of law) are hardly IP cabals. I do on occasion provide a comment on various legal blogs, but that is sporadic at best.

What the heck is a "maximalist"? Does mentioning copyright, patent, or other somewhat related law suddenly make one a dyed in the wool supporter of the most extreme kind? My recollection is that I have never expressed any personal views about my "love of" patent and/or copyright law other than a preference for the concepts underlying the Copyright Act of 1909 (notice, limited terms, publication for rights to attach, etc.). The reason I have not expressed personal views is because there are pros and cons to the laws, not to mention that I do not subscribe to the belief that inventions are created because we have Title 35 and original works of authorship are created because we have Title 17.

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No "cons"? Seriously? Certainly cons associated with many of the provisions contained within the Copyright Act of 1976. Certainly cons associated with select groups being able to apply for the award of such legal rights. Cons associated with states and sovereign immunity principles, where the states can be awarded rights under our patent and copyright laws and can assert them against non-government parties, but are able to avoid claims against them by hiding behind sovereign immunity. The doctrines underlying some of the foregoing are of general applicability across the spectrum of US law.

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EC is the elected executive of the EU! It's President and college of Commissioners are nominated by the democratically elected national governments and approved by the vote of the directly elected EP! That procedure is very close to the process of the election of the executive branch on the national level by the legislatures(nat. Parliaments) held all across the EU! And like the national governments the EC is indirectly elected as an outcome of the (European) elections!!!

As for corruption related allegations you'll need to provide some evidence in order to be believable, I'm afraid!

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"You make it sound as if mentioning other factors believed to be important is an activity to be avoided."

No one said that. But if it's a cause that you think is important enough you ought to do it yourself instead of being lazy and expecting everyone else to do it for you. Start your own blog and get an audience or come here and discuss the issues yourself. If you don't even care enough to do that and want to rely on everyone else then don't be surprised when people don't take you seriously.

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Who said I think it is a "cause", which sounds as if you believe that alternate dispute resolution provisions in trade agreements are almost a "must have"?

I do not believe I said these should be "must have" provisions, but only attempted to note that there are instances when promoting such provisions are not without merit and why this may be so.

The article here, and some earlier articles here, do make fair points, but there are also fair points on the other side of the issue that I happen to believe are worthy of mention.

I share the view that there have been and are some ongoing abuses and the complaining party should be identified and vilified. I hew to the position, however, that just because on occasion someone may abuse a system is not a sufficient reason to reject such a system in toto.